March 22, 2021
State revenues are now expected to match the pre-pandemic Feb. 2020 revenue forecast. Revenues in 2019–21 are now forecast to be $52.334 billion (an increase of 13.6% over 2017–19). In 2021–23, revenues are expected to grow by 8.2%, to $56.615 billion. In 2023–25, revenues are expected to grow by 5.8%, to $59.906 billion.
Given the new revenue forecast, the current state operating budget not only balances over four years, it leaves a substantial estimated unrestricted ending fund balance of $2.999 billion. On top of that, the budget stabilization account (BSA, or the rainy day fund) balance is estimated to be $2.394 billion at the end of 2021–23.
The healthy balance sheet means that legislators have an exceptionally firm foundation for the 2021–23 operating budget. Billions of dollars have also been appropriated by the federal government over the past year for COVID relief in Washington.
The state revenue system and budget has come through this emergency remarkably well, and the state does not need to increase taxes to meet its obligations. At the same time, many individuals and businesses in Washington continue to feel the negative effects of the recession. Washington can use federal aid funding to help them get through this time. Raising their taxes to fund relief would be counterproductive. As long as the state refrains from using federal relief money to begin new, ongoing programs, the eventual cessation of federal relief should not trigger a need for new revenue sources.
Read the policy brief here.Categories: Budget , Publications , Tax Policy.
Tags: 2019-21 , 2021-23